Mrgybe........You place the blame squarely on the regulatory environment.

When?

Mrgybe wrote earlier

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You may also wish to investigate why a new oil refinery hasn't been built in the US since 1976. The same people that oppose the pipeline oppose new refineries.

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The US industry has responded to the difficulty obtaining permits for new refineries by upgrading existing facilities and by building many new refineries overseas.

I know you are aware of all of the reasons that energy companies invest in capital improvements. Yet, twice it is front and center with environmental concerns (and the resulting regulations) for the lack of this investment.

5. Gasoline will never be $10/gallon, at that price, we would be gassifing coal and making synthetic gasoline, I believe the price point of synth-gasoline is about $7.50/gallon, and remember, we're the Saudi Arabia of coal. If we have to start down that road, it'll get even cheaper as we build up capacity. We'll never run out of gasoline, it will probably get more expensive though, just don't believe that panic that isobars is selling.

Selling? No ... parroting ... quoting some of the few economists who predicted the 2007/8 bubble collapses in time to not only avoid them but greatly prosper from them. Did you get rich, as they did, when the real estate, stock market, private debt, and consumer discretionary bubbles burst? Let's hope they're wrong about gasoline prices, despite Obama's stated goal of "European gas prices" in order to force his green agenda on us.

I used to be a huge believer of peak oil based on analysis of decline rates and supply models of all the known big oil fields and enough of the smaller ones to cover nearly 80% of the worlds oil supply vs. what seemed like rational demand forecasts based on the s-curve of consumption (e.g. cars per thousand) in the emerging world following the trend of the developed world. Made for a pretty convincing argument.

Now not so much. It took a while for the production growth out of the Bakken, Eagleford, etc to smack my eyes open. Oil shales and fracking have already changed the decline rates of US production. Back in 2010 the IEA estimated that the recoverable reserves in oil shales were almost equivalent to the recoverable reserves of conventional oil. Since then we have had 3 years of non stop oil shale exploration success. Yes, it will probably take South Africa, Australia, France, CHina, Argentina, etc 10 years to convince the local populations to allow fracking, and another 10 years to get the infrastructure in place to economically extract it, but if oil spikes to (pick a number, say) $200 / bbl, that 20 year time frame becomes 3-5 years. And in the mean time the US extracts more and more of its oil consumption locally, creating jobs and reducing imports. Damn, it feels good to live in America.

CB--EPA updated mercury and particulate regulations under Obama. They had the authority, and indeed the mandate to update those regulations under laws written before Clinton--but Bush stalled their implementation at the recommendation of Cheney. The energy businesses saved millions. But as you have pointed out, all of these health regulations save far more than they cost.

I know you are aware of all of the reasons that energy companies invest in capital improvements. Yet, twice it is front and center with environmental concerns (and the resulting regulations) for the lack of this investment.

You seem to have lost the plot a little. The topic is "why not build a new Canadian refinery?" There is not a shadow of doubt that environmentalists would strenuously oppose that project.......thus my comments. That is political pressure, it works and is separate from regulation. No credible person connected with the oil industry opposes sensible regulation. As for the "lack of this investment" I think you will find that the oil and gas industry remains among the largest investors in this country.

Maybe so, but an old client of mine in the refinery biz told me that refineries seem to get built as crack spreads peak, then the refiners are forced to consolidate to reduce costs . Its a very risky business...just last year VLO, and TSO were on their deaths beds, and now that cracks have rebounded the stocks are back up.

There is always opposition to building projects. Professionals, those who understand the legal framework, are able to get projects approved, and they get built if they are feasible. Lots of people who may or may not intend to actually build a project propose things. Sometimes consultants get a lot of money analyzing projects where no investment funds will ever be made available.

Amateurs, and those who are always trashing the laws and the regulations and asking for instant approval with political pressure, have a hard time. They ask for the rules to be bent--and then scream about lawyers when they lose a lawsuit. That's what happened to Chevron in Richmond. They kept moving the goalposts and hiding the ball, and the judge told them their EIR was inadequate. They blame it on opposition, rather than on not dealing with the substantive issues (in that case air emissions) in a forthright manner. Sometimes it takes more than talking points.

Some of those who slammed Obama for not approving the pipeline before the election have no idea of the value of a good record when the project is actually approved and some of the opponents sue, as they will. So sad. Some of them even support amateurs in politics. It doesn't really seem like ignorance is bliss.

So Chavez is dead. Venezuelan heavy crude has declined from 3 mm bbls/d to 2 mm bbls/d due to inept management under his rule (not only did he kick out all the US oil companies, he fired all the Venezuelan oil men at PDVSA and replaced them with his stooges). If they elect a pro business pro oil president, the Keystone pipeline probably becomes uneconomic. I wonder what they are thinking in the TransCanada boardroom right now.

Chevron Corp. may have broken a law against government contractors' giving money to political campaigns by contributing $2.5 million to a Republican super PAC last fall, according to a complaint filed Tuesday with the Federal Election Commission.

The complaint, from a government watchdog group and several environmental organizations, argues that Chevron's donation violated a 73-year-old "pay-to-play" law that bars federal contractors from contributing to political candidates, committees or campaigns. Oil company Chevron, based in San Ramon, had $501 million in sales to the federal government in the last fiscal year.

So Chavez is dead. Venezuelan heavy crude has declined from 3 mm bbls/d to 2 mm bbls/d due to inept management under his rule (not only did he kick out all the US oil companies, he fired all the Venezuelan oil men at PDVSA and replaced them with his stooges). If they elect a pro business pro oil president, the Keystone pipeline probably becomes uneconomic. I wonder what they are thinking in the TransCanada boardroom right now.

Maybe they are thanking the State Department for the delays until we know how Venez. oil will fare under the new leader! I just dumped VLO stock...I wonder if that was a good idea!

Time to revive this thread. Obama is said to be preparing a speech on global warming, and a decision on the pipeline is probably imminent as well. With the GOP now dominated by folks who lecture scientists in South Florida with comments like "God destroyed the Earth with water the first time, and he promised he wouldn't do it again. So all of you who are pushing fears about sea-level rise, go back and read the Bible.", it seems that Obama is going to have to go it alone. Without, as they say, the low information legislators. So what might he say?

First, it is better to ship the Canadian tar sands oil by pipeline than by trucks and rail, as it is now being shipped. While the enviros are right that the Keystone pipeline is an important symbol in moving towards a lower carbon future, denying the pipeline would actually have more environmental impacts than approving it with the right conditions. Last time I checked Canada was a sovereign state, and can decide to develop the tar sands without shipping it by pipeline through the US. Second, it always was necessary to do the route study work, no matter what the oil company apologists said. The Department of State, if it approves the project, is required to pick the least damaging route. Stream crossings and wetland impacts all matter, and that's what much of this delay has been about.

Now things get interesting. Despite the constant delays and obstruction by the GOP, there are certain things that are at the discretion of the administration. One of those is mitigation. To the degree that the tar sands oil has a higher carbon signature than other fuels, Obama certainly has the ability to require mitigation to offset that increment of greater CO2. Indeed, he has broad discretion to pick and choose measures. What might he pick?

The economics are important, and I try to pay attention, although I am not an expert. But we know that fracking brought the price of natural gas down dramatically, and has hammered coal. Coal, of course, has tried to blame it on Obama, not on the market--or on Cheney who cleared the way for low-regulation fracking.

I suspect that some of the hysteria behind the oil companies attacks on subsidies for renewable energy and electric-powered cars comes from their fears that successful development of alternatives will lead to a loss of market share for oil and gas. Take for example the electric car. I've been hearing that the lower cost of electricity--about 1/3 per mile--and lower maintenance on electrical motors and brakes--offset the higher initial cost of electrical cars. See for example: http://www.csmonitor.com/Business/In-Gear/2012/1207/Are-electric-cars-cheaper-to-maintain-than-gas-vehicles (I'm sure that some will be disappointed that I didn't use a Wikipedia source.)

So I'm predicting approval for the pipeline, and a speech that uses all of the discretionary authority that Obama has to mitigate the impacts of the pipeline and higher carbon tar sand oil, and perhaps goes beyond that to use the emission control authority he has to move the dial on the economics of alternatives. We can expect great wailing and outlandish claims about the imminent collapse of civilization from the oil industry and their annuitants.

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